How flattering that you'd sign up just to post in this thread. Welcome to head-fi, sorry about your wallet.
Headphone functionality
If you do it the way specified on the front page, then you should retain the headphone jack signal.
Capacitor SQ
That ultimately comes down to the overall sound of your rig. What headphones (/amp/cables/other accessories) are you using? I love my diyMod 4G with Black Gate NX Hi-Q 47uF 6.3V to PIMETA with AD8620/AD8610 + TREAD through my rescreened Grado Labs SR60s with Canare Star Quad recable, Grado Labs Jumbo Pads with glue mod and sticky tack driver mod. I was told at a meet that my headphones sounded better than another member's GS1Ks, but again, it all completely comes down to your sound preference and rig.
Short answer goes something like "Find the sound you like on your rig. I like the BG NX Hi-Q 47uF 6.3V in my system."
Internal Capacitor
It depends on what caps you want to use and what other mods you've done to your iPod. gueri_fr proved to us that
internal caps was a possible option when you did the CF mod. So far as I know, others have not been able to reproduce the internal caps, but we never say 'die' in DIY, do we?
If you somehow figure another way, do share with us.
Docking Speakers
They won't work unless there is some method of keeping the DC from getting to the speaker. It boils down to each speaker docking station, so one can't really say for sure. Generally, I would say they wouldn't have that protection because there isn't a threat of DC being in the signal with the stock iPods, but again, you can never really say for sure. Why don't you open your speaker dock and find out?